The Environment Protection Authority (EPA) has taken action against Hunter Water over a spill of corrosive liquid at Swansea.

The EPA says the incident occurred when 350 litres of corrosive liquid spilled onto soil due to a failure at Hunter Water's sewerage pump station at Swansea in January 2013.

The incident was reported by a Hunter Water contractor.

The EPA says Hunter Water has agreed to an Enforcement Undertaking that includes paying $60,000 to Lake Macquarie Council for regeneration works at Black Ned's Bay and to put a remedial action plan in place.

The liquid is toxic if it is inhaled or ingested or comes into contact with skin.

In June 2013 an underground bore adjacent to the spill was reported to be contaminated by the same chemical.